Binhai Investment plans to buy 2% stake in Sinopec LNG
Hong Kong-listed Binhai Investment Company plans to acquire a 2% stake in Sinopec Tianjin Liquefied Natural Gas Co. (Sinopec LNG), it said on September 19 in a stock exchange filing.
Binhai said that it has entered into an agreement of intent to acquire the stake in Sinopec LNG from Tianjin TEDA-Nangang Development Group Co. It will pay earnest money of 150mn yuan ($21.15mn) upfront. The negotiations for the proposed acquisition may take up to six months, the company said.
The company can recover the upfront payment if the deal does not go through. If the agreement proceeds, Binhai will make up for the shortfall or get a refund depending on the final price.
Sinopec LNG is 98% owned by the Chinese state-owned energy company Sinopec and 2% by Tianjin TEDA-Nangang Development Group Co. It is principally engaged in the construction and operation of LNG terminals as well as the storage, processing and sales of LNG products.
Binhai said that acquiring an equity interest in Sinopec LNG is anticipated to provide various benefits to the company, such as significantly increasing the capability of gas storage for peak shaving, and seamlessly connecting the group’s upstream resources and downstream markets.